Market Updates »
Believe it or not, the first half of 2022 is now behind us. The first half of the year proved to be a very busy year for the Denver real estate market with homes selling within hours of being on the market and often well over their original list price. The second half of 2022 is starting out with a very different story for the Denver real estate market.
As we are heading into the second half of 2022, we’re starting to see a new trend, one that includes homes sitting on the market longer and price reductions. In fact, as I am writing this article, there are currently 1,197 homes for sale that have seen a price reduction in the past 7 days; while in this same time period, there have been 1,168 new homes hitting the market. Previously, we would have only seen a couple hundred price reductions in a 7-day period. This tells us that with the new market conditions, it is much easier to overvalue a home than it was previously.
Although the market is undoubtably softer now than it was this time last month, it is important to make sure that we also look at the fact that the number of homes that went under contract in the past 7 days is 1,309, which is higher than new homes for sale. This tells us that buyers are still actively buying. In fact, although not as common, we still see homes go under contract within days of being on the market, with multiple offers and even over list. To an untrained eye, you might feel the market is completely random right now and that homeowners are just spinning a wheel when listing their home to see how buyers will react. There might be some truth to this; however, with today’s market, pricing and marketing your home correctly has never been more important. We will go into more detail on this in next week’s article, so be sure to check back for details!
Right now, the market feels a lot like our traditional seasonal slowdown; however, there are a couple of big differences this year that we will be watching. First, it’s only the beginning of July. In previous years, we’ve seen the seasonal slowdown start as early as the end of July but more historically in August. Second and most importantly is the sizeable increase in interest rates we’ve seen in the past 1-2 months. Typically, the seasonal slowdown is caused by buyers getting out of the market due to the end of the summer, the busy school year, and upcoming holidays. This year we can surely blame increasing interest rates and overall market uncertainty for the slowdown we’re currently experiencing. Because of this, I would argue we haven’t even seen the normal seasonal slowdown yet, and that it is likely still coming. If I am correct on this, the market could look even slower in a month’s time. However, without a crystal ball we can’t know for sure. What we do know is that TK Homes will be actively observing the market conditions and as always educating homeowners, buyers, and investors with our weekly Denver Real Estate blog.
~ Article written by Team Leader & REALTOR®, Trevor Kohlhepp